Jason,

You are promoting your prior fund, my apologies. Thanks for clearing that up.

So only 40% of charterholders make their living off of active management? You're right, I stand corrected, the institute definitely doesn't have it's fate tied to the future of active management or any incentive to promote articles promising a bright future for stock and bond pickers.

Your masters thesis also claims that 87% of non-us equity managers outperform their benchmarks when measured by the Sharpe ratio. That's all I needed to see to know that these numbers are incredibly outdated and no longer relevant. You should probably stop referencing a 20 year old analysis that only covers a 10 year time period. If you were to replicate that exact same analysis, instead of using 1987-1997 use 1987-2017, I guarantee (I'm a fan of absolutes) that the results are significantly less favorable for active managers, regardless of if we're talking sharpe, treynor, sortino, etc.

Plain and simple, downside deviation is more than adequate as a risk measurement for broadly diversified investments. Anyone who reads this article and is unaware of the difference between standard deviation and downside deviation has been educated and is better off now. That is the real service of this article. However, the implication that an alternative method of measuring risk will improve outcomes for active managers is false logic.